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Monthly Archives: July 2013

Hello everyone. This week’s issue of PlaneBusiness Banter is now posted. This week we give you a quick peak at the airline earnings that have rolled out so far this week including those from: US Airways, Delta Air Lines, Hawaiian Airlines, Allegiant Travel Spirit Airlines. Next week we’ll start our meticulous parsing of the earnings calls.

Meanwhile, Southwest Airlines, United Airlines, and Alaska Air Group all report 2Q13 earnings this week as well.

In the earnings we’ve seen reported so far, US Airways and Delta Air Lines both reported record setting quarters — both airlines came in above consensus estimates and both airlines also provided better than expected guidance for 3Q13. Outstanding quarter for both airlines.

Hawaiian Airlines also had a better than expected quarter — and the airline will see slower capacity growth during the remainder of the year, which should improve the airline’s revenue performance for the remainder of the year.

As for Spirit, the airline turned in a good quarter, but it was about as expected. No real surprises. Meanwhile, Allegiant underwhelmed. Guidance from the airline was not particularly positive either.

This week we also look at United Airlines in a column entitled, “Great Expectations Gone Awry.”

We update you on the latest exec moves in the American/US Airways merger, and we look at which airline stocks had a good week last week. On the oil front — did oil and jet fuel continue to move up again last week? We’ll get you updated.

Holly

Hello everyone. Mea culpa for the lateness of the posting of this week’s issue. I’m afraid when one is self-employed, it’s hard to “call in sick.” In addition– the cat can’t type.

But we made it. Finally.

As puny as I was this week, I think we have a pretty good issue for you. First our contributing editor, analyst, and chief airline dork, Brett Snyder takes a thorough look at the recent GAO study that looked at the proposed American/US Airways merger. I’m sure you won’t be surprised to find out that he thinks the GAO took some shortcuts with this study. In addition, there’s nothing in here that points to any reason the Department of Justice should not approve the merger. Contrary to what some die-hard anti-merger pundits out there would like you to believe.

We also look at the May DOT Air Travel Consumer Report this week. We’re detecting some trends over the last few months — the most notable being a decline in the operations of both SouthwestAirlines and AirTran.

We told you so.

We told PBB subscribers in December, after the airline’s investor day presentation, that Southwest did not seem to have any idea how problematic its planned codeshare move this spring could be for passengers. Analyst Bob McAdoo at Imperial Capital said at the time that the negative publicity could rival that generated by United Airlines in 2012.

That’s exactly what’s happening. Scott McCartney, columnist with the Wall Street Journal, touched on some of the issues in his column this week.

But we talk about a whole lot more this week as well: Asiana; Spirit Airlines’ complaint numbers; Alaska Air Group’s new dividend (the new of which sent shares soaring last week); a JP Morgan downgrade of both JetBlue and Southwest; why crude oil and jet fuel prices are soaring; and we get caught up with all things American. And US Airways.

This week we are talking a lot about the obvious — the crash of Asiana Airlines Flight 214 in San Francisco. But we don’t really get into the particulars of the “why” — that is what the NTSB is working on now. Although if we were to guess, it isn’t going to take that long to figure this one out. Or as I said in this week’s issue this isn’t a TWA 800 situation.

In our column this week we look at the communications surrounding the crash. How quickly Asiana did or did not respond on Saturday, how inept the coverage of the crash was on CNN, and how social media is where you found the most accurate information most quickly.

As I point out, when you have a survivor of an airplane crash Tweet that he just got off the plane — we’ve just crossed a new boundary here folks.

On the stock side, it was a pretty good week for the sector — not outstanding — but acceptable.

However, shares of Brazilian airline GOL once again took a huge hit, as they dropped 17%. That didn’t stop Imperial Capital analyst Bob McAdoo from initiating coverage and voicing a very bullish argument on why now might be a great time to jump into the stock.

As you know, we are a big fan of Bob’s.

Unfortunately the news from the oil markets was not what the airlines wanted to hear last week. Nor has it been this week either. The reason — the political unrest in Egypt. Oil moved up sharply last week, and it has not slowed down this week — hitting a new 15 month high Wednesday. Jet fuel has not been that far behind.

So sit down, make yourself a Moscow Mule, and enjoy a good read. All this and more in this week’s edition of PlaneBusiness Banter.

Hello there Earthlings. This week’s edition of PlaneBusiness Banter is now posted. I’m going to be rather brief this evening, as frankly, I’m pretty darn tired. It’s been a long day!

This week we began to get more feedback from the analyst community on just how 2Q13 results are shaping up. United Airlines issued updated guidance last week – the airline now could post lower margins for 2Q13 than it did a year ago. Not quite what a lot of people were expecting.

Southwest’s goal of reaching a 15% ROIC in 2013? Probably not going to happen.

US Airways, meanwhile, looks poised to post the best operating margin of the big four U.S. carriers for 2Q13.

Traffic and PRASM estimates (at least from those airlines that disclose them) continue to roll in this week and next.

Before you know it, it will be time for earnings calls once again.

In terms of second quarter stock performance, the sector did not post quite as strong a quarter as it did for the first quarter.

But it was still an acceptable quarter.

We go over which airlines fared the best and which ones tanked for both 2Q13 and for the last week.